The Duel between Well-Known marks and the Standard they Represent

As I was drafting a set of pleadings this week, a question came to mind-

Say a mark X has become extremely well-known , such that it is a symbol  of a high quality multi-purpose product that finds application in various industries.  Mark X now moves against Mark XA in a contentious proceeding, such as an opposition. Can Mark X object to XA on the ground that XA in fact misrepresents a certain kind, quality, etc. that the mark X is symbolic of?

The objection I have detailed above, is under S. 9(1)(b) of the Trade Marks Act, 1999, as an absolute ground of refusal to registration of a mark.

One vehement view that came out of an informal discussion was that making such an argument would attract an objection of genericism to the mark X itself. However, I hold a slightly different opinion.

I think, the moment a mark is well-known, all other objections somewhat fade out. In other words, if a mark is so well-known to become symbolic of a certain quality, any other mark that is deceptively similar, would fall in the ambit of S. 9 (1)(b).

Moreover, while Section 9(1)(b) is an absolute ground of refusal, covering various aspects relating to lack of distinctiveness, the fact that a mark is extremely well known, such that it is symbolic of a certain stature, in many ways does append “acquired distinctiveness” to the mark. As well established, distinctiveness attributed to a mark may be either inherent or acquired.

I am not convinced that a well-known mark may not be able to adduce the ground of S. 9 (1)(b) to establish its case. The fact that a mark is well-known, well-protected, and so long as the proprietor of the mark has undertaken every possible effort to prevent the mark from becoming a generic term, to my eyes, such ground must be available.

On the other hand, am sure the opinion is, that if a mark has become symbolic of a standard, it must fall into the public domain, for anyone meeting those standards to use. My reply to that is, wouldn’t such allowable use, result in giving and using an implied naked license, which by itself is voidable (even if not void)??

It must be appreciated that the concept of a well-known trademark arose through the law of passing off and was later incorporated under relative grounds of refusal. Well-known marks, in my view, having acquired immense distinctiveness, must be allowed to take advantage of what they stand for, i.e. the quality and stature they command, and S. 9(1)(b) be allowed to move, as a ground during contentious proceedings.

When is a “Well-Known” mark a well-known mark?

In an earlier post, I had written on the distinction between “goodwill” and “reputation” of a trademark. I had also written on how reputation alone is sufficient for a well-known mark to exercise its exclusionary prerogative against third parties in a foreign jurisdiction. 

However, there are a few nuances of well-known marks that I had reserved for this post to explore and explain.

It must be understood that intellectual property rights are, by default, territorial rights. Therefore, any rule which is an exception to this default mode of territoriality must satisfy certain stringent conditions in order to be enforceable. 

A well-known mark is an exception to the rule of territorial application of trademark rights, and therefore, the owner of a well-known mark too must meet certain essential conditions beyond reproach. What might those conditions be?

Before I proceed any further, I must clarify that when I speak of enforcement of a well-known mark in a foreign jurisdiction, I refer to a situation where the owner of the mark does not have a registered trademark in the foreign jurisdiction, nor has he used it in the course of business in that foreign jurisdiction. In other words, his only justification for the enforcement of the mark is its status as a well-known mark i.e. “reputation”.

For the owner of a well-known mark to have the ability to preclude third parties in foreign jurisdictions from using the mark in the same field of business, the mark should have become well-known prior to the date of adoption of the mark by a third party in the foreign jurisdiction.

Let’s take “Infosys” as an example, which was founded in 1981 in India. Let’s assume that in 1985, a Brazilian entity had adopted “Infosys” in connection with the same field of business.

In the absence of a registered trademark in Brazil, and in the absence of use of the mark by Indian Infosys in the course of business in Brazil, would it have been possible for the Indian entity to prevent the Brazilian entity in 1985 from using the mark? The answer to this question is as follows:

1. The only way the Indian entity could have done so, is if it could have proven that before the date of adoption of the mark by the Brazilian entity in 1985, the Indian entity’s mark enjoyed a well-known status. In short, it had a reputation to reckon with before 1985.

2. This requirement needs to be qualified further. It is not enough for the Indian entity to show that it enjoyed a reputation in several jurisdictions. It is imperative to show that the entity enjoyed a reputation in Brazil before 1985. This has to be established on the basis of advertisements, trade talk, anything that can objectively establish knowledge of the Indian entity in Brazil prior to the adoption of the mark by the Brazilian entity.

Seen from this perspective, the requirement of “local reputation”, although without actual use in the course of trade, has the effect of “territorializing” the jurisprudence of well-known marks. 

The corollary to this proposition is that, at a given point in time, it is perfectly legitimate for different entities in different jurisdictions to use the same trademark, without having the right to exclude others in foreign jurisdictions. This is similar to different entities holding patents in different jurisdictions on the same invention.

One judgment that is worth reading on this issue is Roca Sanitario S.A. v. Naresh Kumar Gupta

More on this later...

"Goodwill" and "Reputation" of a Trademark: Is there a Difference?

It is common for people to use “goodwill” and “reputation” interchangeably when referring to the popularity of a trademark, but are these terms strictly synonyms? Law and logic, both appear to say they are distinct.

Goodwill is generated by actual availability of the good/service in connection with which the mark is used. Goodwill, which is the basis for a passing off action, requires actual business to be transacted using the mark, either by making the products available or by provision of services.

Reputation, on the other hand, is knowledge and awareness of the premium a particular a brand/mark commands although the good/service in connection with which the mark is used, may not be available in a particular territory/market.

For instance, a shoe designer like Jimmy Choo may be so popular outside the country that his reputation spills over into India through word of mouth or trade talk or interviews, although his shoes may not be available in India.

Typically, reputation is sufficient for a passing off action to be instituted for a well-known mark. In other words, actual business using the mark need not be transacted in India for the owner of a well-known mark to prevent others from using the mark. Existence of reputation, which can be established from literature, is sufficient.

This logic finds statutory sanction since the definition of a well-known mark under the Trademarks Act, 1999 does not insist on use of the mark within India. Incidentally, under Section 29(6), use of the mark in advertisements too constitutes use.